FALSE000156810000015681002025-03-102025-03-10

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________

FORM 8-K
_________________________

CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 10, 2025
_________________________

PAGERDUTY, INC.
(Exact name of Registrant as Specified in Its Charter)
_________________________

Delaware001-3885627-2793871
(State or Other Jurisdiction
of Incorporation)		(Commission File Number)(IRS Employer
Identification No.)
   
600 Townsend St., Suite 200
San Francisco, California
 94103
(Address of Principal Executive Offices) (Zip Code)

(844) 800-3889
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)  
_________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock, $0.000005 par value per sharePD
New York Stock Exchange (NYSE)
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨


Item 2.02    Results of Operations and Financial Condition

On March 13, 2025, PagerDuty, Inc. (the "Company") reported financial results for the quarter and fiscal year ended January 31, 2025. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference.

The information in this Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information shall not be deemed incorporated by reference into any other filing with the Securities and Exchange Commission made by the Company, whether made before or after today’s date, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific references in such filing.

Item 8.01 Other Events

On March 10, 2025, the Company’s Board of Directors authorized a share repurchase program for up to $150 million of common stock (the “New Share Repurchase Program”), subject to certain limitations and conditions. The New Share Repurchase Program replaces the Company’s prior $100 million share repurchase program, which was authorized by the Company’s Board of Directors in May 2024 and completed in November 2024.

Share repurchases under the New Share Repurchase Program may be made from time to time through open market purchases, privately negotiated transactions or other legally permissible means, including pursuant to Rule 10b5-1 trading plans. The New Share Repurchase Program does not obligate the Company to acquire a specified number of shares, and may be suspended, modified, or terminated at any time, without prior notice. The number of shares to be repurchased will depend on market conditions and other factors. Repurchases under the New Share Repurchase Program are expected to be funded from existing cash balances. The New Share Repurchase Program is expected to continue through March 13, 2027, unless extended or shortened by the Board of Directors.

Item 9.01    Financial Statements and Exhibits

(d)    Exhibits
Exhibit No. Description
99.1 
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 PagerDuty, Inc.
  
  
Dated: March 13, 2025
By:/s/ Irving Gomez
 Name:Irving Gomez
 Title:Vice President, Deputy General Counsel & Secretary


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PagerDuty Announces Fourth Quarter and Full Year Fiscal 2025 Financial Results

Fourth quarter revenue increased 9.3% year over year to $121 million
Fourth quarter loss from operations was $12 million; non-GAAP operating income was $22 million
Announced $150 million share repurchase program
Introduced Agentic Artificial Intelligence ("AI") offerings in the PagerDuty Operations Cloud

SAN FRANCISCO – (BUSINESS WIRE) – March 13, 2025 – PagerDuty, Inc. (NYSE:PD), a leader in digital operations management, today announced financial results for the fourth quarter and full year of fiscal 2025, ended January 31, 2025.

“Our relentless focus on operational excellence and efficient growth delivered another strong quarter, exceeding both top and bottom line guidance ranges,” said Jennifer Tejada, Chairperson and CEO, PagerDuty. “Our customers continue to prioritize digital operations as mission-critical to their business, and PagerDuty is their trusted partner in driving operational efficiency at scale. This quarter's AI innovation, combined with new features added to all PagerDuty Incident Management packages, positions PagerDuty well to accelerate enterprise momentum in the second half.”

PagerDuty also announced today that its Board of Directors has authorized a new share repurchase program for up to $150 million of common stock.

“PagerDuty continues to demonstrate strong business fundamentals and sustainable free cash flow generation,” said Howard Wilson, Chief Financial Officer, PagerDuty. “This second share repurchase program underscores our ongoing commitment to managing share count growth while reflecting our Board and management team’s continued confidence in our long-term strategy and market opportunity.”

Fourth Quarter Fiscal 2025 Financial Highlights

•Revenue was $121.4 million, an increase of 9.3% year over year.
•Loss from operations was $11.7 million; operating margin was negative 9.6%.
•Non-GAAP operating income was $22.3 million; non-GAAP operating margin was 18.3%.
•Net loss per share attributable to PagerDuty, Inc. common stockholders was $0.12.
•Non-GAAP net income per diluted share attributable to PagerDuty, Inc. common stockholders was $0.22.
•Net cash provided by operating activities was $31.4 million, with free cash flow of $28.6 million.
•Cash, cash equivalents, and investments were $570.8 million as of January 31, 2025.

Full Year Fiscal 2025 Financial Highlights

•Revenue was $467.5 million, an increase of 8.5% year over year.
•Loss from operations was $59.8 million; operating margin was negative 12.8%.
•Non-GAAP operating income was $82.7 million; non-GAAP operating margin was 17.7%.
•Net loss per share attributable to PagerDuty, Inc. common stockholders was $0.59.
•Non-GAAP net income per diluted share attributable to PagerDuty, Inc. common stockholders was $0.85.
•Net cash provided by operating activities was $117.9 million, with free cash flow of $108.4 million.

The section titled “Non-GAAP Financial Measures” below contains a description of the non-GAAP financial measures and reconciliations between GAAP and non-GAAP financial information.




Fourth Quarter and Recent Highlights

•Annual recurring revenue ("ARR") as of January 31, 2025 grew 9% year over year to $494 million.
•Customers with ARR over $100 thousand grew 6% to 849 as of January 31, 2025, compared to 804 in the prior year.    
•Dollar-based net retention rate was 106% as of January 31, 2025, compared to 107% in the prior year.
•Free and paid customers totaled more than 31,000 as of January 31, 2025 representing approximately 10% growth year over year.
•Total paid customers were 15,114 as of January 31, 2025, compared to 15,039 in the prior year.
•Remaining performance obligations were $440 million as of January 31, 2025. Of this amount, the Company expects to recognize revenue of approximately $302 million, or 69%, over the next 12 months with the balance to be recognized as revenue thereafter.(1)
•Announced upcoming Agentic AI offering including Agentic Site Reliability Engineer, Operational Insights, and Scheduling Optimization Agents as well as AI use case library.
•Introduced new generative AI and automation features of PagerDuty Advance, which is embedded across the PagerDuty Operations Cloud platform, in collaboration with Amazon Web Services.
•Published the 2025 State of Digital Operations Report, a global survey of 1,100+ information technology ("IT") and business leaders asking about the latest opportunities around operational transformation, AI and automation.
•Named a leader in numerous awards, including Fortune Best Workplaces for Parents, Built In Best Places to Work, 2025 BIG Innovation Awards, and 2024 Forbes CIO Next List.
•Released a research study revealing that 88% of executives expect a major incident in 2025 as large as the July 2024 global IT outage, pointing out the critical nature of PagerDuty.
•Appointed Allison Corley as Chief Customer Officer and David Williams as Senior Vice President of Product.
•Appointed Sarah Franklin to the Board of Directors.
•Lands and expands include: Coreweave Inc., Coupa Software, Inc., Datadirect Networks, Inc., NVIDIA Corporation, Palo Alto Networks, Inc., Pinterest, Inc., Toyota Motors Co., LTD, and Zscaler Inc.

(1)Beginning in the first quarter of fiscal 2025, the Company began to include contracts with an original term of less than 12 months in this disclosure which comprised $128 million of remaining non-cancelable performance obligations as of January 31, 2025.




Financial Outlook

For the first quarter of fiscal 2026, PagerDuty currently expects:

•Total revenue of $118.0 million - $120.0 million, representing a growth rate of 6% - 8% year over year.
•Non-GAAP net income per diluted share attributable to PagerDuty, Inc. common stockholders of $0.18 - $0.19 assuming approximately 94 million diluted shares and a non-GAAP tax rate of 22%.

For the full fiscal year 2026, PagerDuty currently expects:

•Total revenue of $500.0 million - $507.0 million, representing a growth rate of 7% - 8% year over year.
•Non-GAAP net income per diluted share attributable to PagerDuty, Inc. common stockholders of $0.90 - $0.95 assuming approximately 93 million diluted shares and a non-GAAP tax rate of 22%.

These statements are forward-looking and actual results may differ materially. Please refer to the section titled "Forward-Looking Statements" below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

PagerDuty has not reconciled its expectations as to non-GAAP net income per share attributable to PagerDuty, Inc. common stockholders to GAAP net loss per share attributable to PagerDuty, Inc. common stockholders because certain reconciling items such as stock-based compensation expense, employer taxes related to employee stock transactions, amortization of debt issuance costs, amortization of acquired intangible assets, acquisition-related expenses, restructuring costs, gains or losses on extinguishment of convertible senior notes, adjustment attributable to redeemable non-controlling interest, and income tax effects and adjustments are out of PagerDuty's control or cannot be reasonably predicted. Accordingly, such reconciliation is not available without unreasonable effort. However, it is important to note that these reconciling items could have a significant effect on PagerDuty's future GAAP results.

Conference Call Information:

PagerDuty will host a conference call and live webcast (Zoom meeting ID 975 4160 6140) for analysts and investors at 2:00 p.m. Pacific Time on March 13, 2025. For audio only, the dial-in number 1-312-626-6799 may be used. This news release with the financial results will be accessible from PagerDuty’s website at investor.pagerduty.com prior to the conference call. A live webcast of the conference call will be accessible from the PagerDuty investor relations website at investor.pagerduty.com.

Supplemental Financial and Other Information:

Supplemental financial and other information can be accessed through PagerDuty’s investor relations website at investor.pagerduty.com. PagerDuty uses the investor relations section on its website as the means of complying with its disclosure obligations under Regulation FD. Accordingly, we recommend that investors monitor PagerDuty’s investor relations website in addition to following PagerDuty’s press releases, SEC filings, social media, including PagerDuty’s LinkedIn account (https://www.linkedin.com/company/482819), X (formerly Twitter) account @pagerduty, the X account @jenntejada and Facebook page (facebook.com/pagerduty), and public conference calls and webcasts.


Forward-Looking Statements

This press release and the related webcast contain “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our future financial and operational performance and outlook, including our financial guidance for the first quarter of and full fiscal year 2026, sustainability of free cash flow generation and long-term operating margin target; market positioning, trends and opportunity; our ability to accelerate enterprise momentum in the second half of fiscal 2026; our ability to achieve our mission to revolutionize operations; our strategic initiatives and the timing of the financial impact of those initiatives; expected demand for and benefits of our offerings; our business strategy and plans, including our ability to expand into new use cases; the impact of our recently-launched solutions; our expectations regarding adoption trends and growth prospects and drivers; and our new share repurchase program. Words such as “expect,” “extend,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “accelerate,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” “shall” and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks and other factors detailed in our Annual Report on Form 10-K/A filed with the Securities and Exchange Commission ("SEC") on March 18, 2024 and our Quarterly Reports on Form 10-Qs filed with the SEC on May 31, 2024, September 4, 2024, and November 27, 2024. Additional information will be made available in our Annual Report on Form 10-K for the year ended January 31, 2025 which is expected to be filed with the SEC shortly after this release and other filings and reports that we may file from time to time with the SEC. In particular, the following risks and uncertainties, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: our ability to achieve and maintain future profitability; our ability to sustain and manage our growth; our ability to attract new customers and retain and sell additional functionality and services to our existing customers; our dependence on revenue from a single product; our ability to compete effectively in an increasingly competitive market; the impact of seasonality on our business; our ability to adapt and respond effectively to rapidly developing technology; our ability to effectively develop and expand our marketing and sales capacities; our ability to enhance and improve our platform or develop new functionality or use cases; the effect of unfavorable conditions in our industry or the global economy, or reductions in information spending, on our business and results of operations; the accuracy of our estimates of market opportunity and forecasts of market growth; adverse consequences that could result from any compromise of our information technology systems or those of third parties with whom we work or our data; adverse consequences that could result from any interruptions or delays in performance of our service; and our ability to maintain the compatibility of our platform with third party applications that our customers use in their businesses.

Past performance is not necessarily indicative of future results. The forward-looking statements included in this press release and the related webcast represent our views as of the date of this press release and the related webcast. We anticipate that subsequent events and developments will cause our views to change. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release and the related webcast.

About PagerDuty, Inc.

PagerDuty, Inc. (NYSE:PD) is a global leader in digital operations management, enabling customers to achieve operational efficiency at scale with the PagerDuty Operations Cloud. The PagerDuty Operations Cloud combines AIOps, Automation, Customer Service Operations and Incident Management with a powerful generative AI assistant to create a flexible, resilient and scalable platform to increase innovation velocity, grow revenue, reduce cost, and mitigate the risk of operational failure. Nearly half of the Fortune 500 and approximately two thirds of the Fortune 100 rely on PagerDuty as essential infrastructure for the modern enterprise. To learn more and try PagerDuty for free, visit www.pagerduty.com.

The PagerDuty Operations Cloud

The PagerDuty Operations Cloud is the platform for mission-critical, time-critical operations work in the modern enterprise. Through the power of AI and automation, it detects and diagnoses disruptive events, mobilizes the right team members to respond, and streamlines infrastructure and workflows across your digital operations. The Operations Cloud is essential infrastructure for revolutionizing digital operations to compete and win as a modern digital business.



Investor Relations Contact:
Tony Righetti
investor@pagerduty.com

Media Contact:
Debbie O'Brien
media@pagerduty.com

SOURCE PagerDuty
Source: PagerDuty, Inc.


PAGERDUTY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)

Three months ended January 31, Year ended January 31,
2025202420252024
Revenue$121,446 $111,117 $467,499 $430,699 
Cost of revenue(1)
19,974 20,358 79,665 77,832 
Gross profit101,472 90,759 387,834 352,867 
Operating expenses:
Research and development(1)
34,611 35,548 141,489 139,769 
Sales and marketing(1)
53,084 53,614 201,821 196,769 
General and administrative(1)
25,496 35,028 104,296 112,575 
Total operating expenses113,191 124,190 447,606 449,113 
Loss from operations(11,719)(33,431)(59,772)(96,246)
Interest income
6,084 6,858 27,492 22,101 
Interest expense(2,370)(2,316)(9,258)(6,500)
(Loss) gain on partial extinguishment of convertible senior notes
— (271)— 3,699 
Other (expense) income, net
(427)528 (215)(433)
Loss before (provision for) benefit from income taxes(8,432)(28,632)(41,753)(77,379)
(Provision for) benefit from income taxes(448)(185)(1,783)12 
Net loss$(8,880)$(28,817)$(43,536)$(77,367)
Net loss attributable to redeemable non-controlling interest(120)(665)(801)(2,178)
Net loss attributable to PagerDuty, Inc.$(8,760)$(28,152)$(42,735)$(75,189)
Less: Adjustment attributable to redeemable non-controlling interest1,844 2,480 11,725 6,568 
Net loss attributable to PagerDuty, Inc. common stockholders$(10,604)$(30,632)$(54,460)$(81,757)
Weighted average shares used in calculating net loss per share, basic and diluted90,422 92,168 92,000 92,341 
Net loss per share, basic and diluted, attributable to PagerDuty, Inc. common stockholders$(0.12)$(0.33)$(0.59)$(0.89)

(1) Includes stock-based compensation expense as follows:
Three months ended January 31, Year ended January 31,
2025202420252024
Cost of revenue$1,288 $1,726 $5,984 $7,586 
Research and development10,051 10,798 44,691 44,800 
Sales and marketing7,483 7,983 31,185 30,345 
General and administrative10,309 11,735 44,350 44,421 
Total$29,131 $32,242 $126,210 $127,152 



PAGERDUTY, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)

January 31,
20252024
Assets
Current assets:
Cash and cash equivalents$346,460 $363,011 
Investments224,366 208,178 
Accounts receivable, net of allowance for credit losses of $1,103 and $1,382 as of January 31, 2025 and January 31, 2024, respectively
107,350 100,413 
Deferred contract costs, current19,787 19,502 
Prepaid expenses and other current assets13,757 12,094 
Total current assets711,720 703,198 
Property and equipment, net21,335 17,632 
Deferred contract costs, non-current25,279 25,118 
Lease right-of-use assets6,806 3,789 
Goodwill137,401 137,401 
Intangible assets, net20,865 32,616 
Other assets3,860 5,552 
Total assets$927,266 $925,306 
Liabilities, redeemable non-controlling interest, and stockholders’ equity
Current liabilities:
Accounts payable$7,329 $6,242 
Accrued expenses and other current liabilities20,322 15,472 
Accrued compensation37,505 30,239 
Deferred revenue, current243,269 223,522 
Lease liabilities, current3,307 6,180 
Convertible senior notes, net, current57,426 — 
Total current liabilities369,158 281,655 
Convertible senior notes, net, non-current393,282 448,030 
Deferred revenue, non-current2,483 4,639 
Lease liabilities, non-current9,637 6,809 
Other liabilities4,661 5,280 
Total liabilities779,221 746,413 
Redeemable non-controlling interest18,217 7,293 
Stockholders' equity
Common stock— — 
Additional paid-in-capital725,483 774,768 
Accumulated other comprehensive loss(485)(733)
Accumulated deficit(595,170)(552,435)
Treasury Stock— (50,000)
Total stockholders’ equity129,828 171,600 
Total liabilities, redeemable non-controlling interest, and stockholders' equity$927,266 $925,306 



PAGERDUTY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

Three months ended January 31, Year ended January 31,
2025202420252024
Cash flows from operating activities:
Net loss attributable to PagerDuty, Inc. common stockholders$(10,604)$(30,632)$(54,460)$(81,757)
Net loss and adjustment attributable to non-controlling interest1,724 1,815 10,924 4,390 
Net loss(8,880)(28,817)(43,536)(77,367)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization5,077 5,137 20,603 20,153 
Amortization of deferred contract costs5,747 5,282 22,008 20,568 
Amortization of debt issuance costs679 622 2,629 2,078 
Loss (gain) on extinguishment of convertible senior notes
— 271 — (3,699)
Stock-based compensation29,131 32,242 126,210 127,152 
Non-cash lease expense515 1,014 3,053 4,439 
Impairment of property and equipment, net and right-of-use assets— 7,164 — 8,368 
Tax benefit related to release of valuation allowance— — — — 
Other(609)(593)(4,461)(3,223)
Changes in operating assets and liabilities:
Accounts receivable(32,793)(29,645)(8,042)(10,662)
Deferred contract costs(7,018)(6,514)(22,459)(18,799)
Prepaid expenses and other assets3,149 2,674 (1,930)— 
Accounts payable537 (451)1,140 (1,453)
Accrued expenses and other liabilities5,486 3,378 4,184 4,145 
Accrued compensation2,910 1,261 6,912 (11,825)
Deferred revenue29,081 30,620 17,695 18,073 
Lease liabilities(1,610)(1,490)(6,115)(5,974)
Net cash provided by operating activities31,402 22,155 117,891 71,974 
Cash flows from investing activities:
Purchases of property and equipment(1,145)(971)(2,791)(2,164)
Capitalized software costs(1,667)(1,572)(6,686)(5,384)
Cash flows related to business combination— (24,071)— (24,071)
Cash flows related to asset acquisition— — — — 
Purchases of available-for-sale investments(61,593)(64,986)(214,714)(216,970)
Proceeds from maturities of available-for-sale investments54,159 54,200 201,986 218,264 
Proceeds from sales of available-for-sale investments— — 2,237 — 
Purchases of non-marketable equity investments— — — (200)
Net cash used in investing activities(10,246)(37,400)(19,968)(30,525)
Cash flows from financing activities:
Proceeds from issuance of convertible senior notes, net of issuance costs— (712)(403)390,831 
Purchases of capped calls related to convertible senior notes— — — (55,102)
Repurchases of convertible senior notes— (204)— (223,675)
Investment from redeemable non-controlling interest holder— — — 1,781 
Repurchases of common stock(2,581)— (100,104)(50,000)
Proceeds from employee stock purchase plan3,256 4,002 8,991 10,294 
Proceeds from issuance of common stock upon exercise of stock options2,812 1,481 4,339 9,871 
Employee payroll taxes paid related to net share settlement of restricted stock units(6,302)(6,628)(28,961)(32,400)
Net cash (used in) provided by financing activities(2,815)(2,061)(116,138)51,600 
Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash(15)50 (124)(401)
Net change in cash, cash equivalents, and restricted cash18,326 (17,256)(18,339)92,648 
Cash, cash equivalents, and restricted cash at beginning of year330,002 383,923 366,667 274,019 
Cash, cash equivalents, and restricted cash at end of year$348,328 $366,667 $348,328 $366,667 


Non-GAAP Financial Measures

This press release and the accompanying tables contain the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP research and development, non-GAAP sales and marketing, non-GAAP general and administrative, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income attributable to PagerDuty, Inc. common stockholders, non-GAAP net income per share attributable to PagerDuty, Inc. common stockholders, free cash flow, and free cash flow margin.

PagerDuty believes that non-GAAP financial measures, when taken collectively, may be helpful to investors because they provide consistency and comparability with past financial performance and can assist in comparisons with other companies, some of which use similar non-GAAP financial measures to supplement their GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies.

The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in PagerDuty’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by PagerDuty’s management about which expenses and income are excluded or included in determining these non-GAAP financial measures. A reconciliation is provided below for each historical non-GAAP financial measure to the most directly comparable financial measure presented in accordance with GAAP.

Specifically, PagerDuty excludes the following from its historical and prospective non-GAAP financial measures, as applicable:

Stock-based compensation: PagerDuty utilizes stock-based compensation to attract and retain employees. It is principally aimed at aligning their interests with those of its stockholders and at long-term retention, rather than to address operational performance for any particular period. As a result, stock-based compensation expenses vary for reasons that are generally unrelated to financial and operational performance in any particular period.

Employer taxes related to employee stock transactions: PagerDuty views the amount of employer taxes related to its employee stock transactions as an expense that is dependent on its stock price, employee exercise and other award disposition activity, and other factors that are beyond PagerDuty’s control. As a result, employer taxes related to employee stock transactions vary for reasons that are generally unrelated to financial and operational performance in any particular period.

Amortization of acquired intangible assets: PagerDuty views amortization of acquired intangible assets as items arising from pre-acquisition activities determined at the time of an acquisition. While these intangible assets are evaluated for impairment regularly, amortization of the cost of purchased intangibles is an expense that is not typically affected by operations during any particular period.

Acquisition-related expenses: PagerDuty views acquisition-related expenses, such as transaction costs, acquisition-related retention payments, and acquisition-related asset impairment, as events that are not necessarily reflective of operational performance during a period. In particular, PagerDuty believes the consideration of measures that exclude such expenses can assist in the comparison of operational performance in different periods which may or may not include such expenses.



Amortization of debt issuance costs: The imputed interest rates of the Company's convertible senior notes (the "2025 Notes" and the "2028 Notes" or, collectively, the "Notes") was approximately 1.91% for the 2025 Notes and 2.13% for the 2028 Notes. This is a result of the debt issuance costs, which reduce the carrying value of the convertible debt instruments. The debt issuance costs are amortized as interest expense. The expense for the amortization of the debt issuance costs is a non-cash item, and we believe the exclusion of this interest expense will provide for a more useful comparison of our operational performance in different periods.

Restructuring costs: PagerDuty views restructuring costs, such as employee severance-related costs and real estate impairment costs, as events that are not necessarily reflective of operational performance during a period. In particular, PagerDuty believes the consideration of measures that exclude such expenses can assist in the comparison of operational performance in different periods which may or may not include such expenses.

Gains (or losses) on partial extinguishment of convertible senior notes: PagerDuty views gains (or losses) on partial extinguishment of debt as events that are not necessarily reflective of operational performance during a period. PagerDuty believes that the consideration of measures that exclude such gain (or loss) impact can assist in the comparison of operational performance in different periods which may or may not include such gains (or losses).

Adjustment attributable to redeemable non-controlling interest: PagerDuty adjusts the value of redeemable non-controlling interest of its joint venture PagerDuty K.K. according to the operating agreement. PagerDuty believes this adjustment is not reflective of operational performance during a period and exclusion of such adjustments can assist in comparison of operational performance in different periods.

Income tax effects and adjustments: For fiscal 2025, PagerDuty used a projected non-GAAP tax rate of 23%. Based on PagerDuty's financial outlook for the first quarter of and full year fiscal 2026, PagerDuty will utilize a projected non-GAAP tax rate of 22% in order to provide better consistency across the interim reporting periods by eliminating the impact of non-recurring and period specific items, which can vary in size and frequency. PagerDuty's estimated tax rate on non-GAAP income is determined annually and may be adjusted during the year to take into account events or trends that PagerDuty believes materially impact the estimated annual rate including, but not limited to, significant changes resulting from tax legislation, material changes in the geographic mix of revenue and expenses and other significant events.

Non-GAAP gross profit and non-GAAP gross margin

We define non-GAAP gross profit as gross profit excluding the following expenses typically included in cost of revenue: stock-based compensation expense, employer taxes related to employee stock transactions, amortization of acquired intangible assets, and restructuring costs. We define non-GAAP gross margin as non-GAAP gross profit as a percentage of revenue.

Non-GAAP operating expenses

We define non-GAAP operating expenses as operating expenses excluding stock-based compensation expense, employer taxes related to employee stock transactions, amortization of acquired intangible assets, acquisition-related expenses, which include transaction costs, acquisition-related retention payments, and asset impairment, and restructuring costs which are not necessarily reflective of operational performance during a given period.



Non-GAAP operating income and non-GAAP operating margin

We define non-GAAP operating income as loss from operations excluding stock-based compensation expense, employer taxes related to employee stock transactions, amortization of acquired intangible assets, acquisition-related expenses, which include transaction costs, acquisition-related retention payments, and asset impairment, and restructuring costs which are not necessarily reflective of operational performance during a given period. We define non-GAAP operating margin as non-GAAP operating income as a percentage of revenue.

Non-GAAP net income attributable to PagerDuty, Inc. common stockholders

We define non-GAAP net income attributable to PagerDuty, Inc. common stockholders as net loss attributable to PagerDuty, Inc. common stockholders excluding stock-based compensation expense, employer taxes related to employee stock transactions, amortization of debt issuance costs, amortization of acquired intangible assets, acquisition-related expenses, which include transaction costs, acquisition-related retention payments and asset impairment, restructuring costs, gain on extinguishment of convertible senior notes, adjustment attributable to redeemable non-controlling interest, and income tax adjustments, which are not necessarily reflective of operational performance during a given period.

Non-GAAP net income per share, basic and diluted

We define non-GAAP net income per share, basic as non-GAAP net income attributable to PagerDuty, Inc. common stockholders divided by weighted average shares outstanding at the end of the reporting period. We define non-GAAP net income per share, diluted as non-GAAP net income attributable to PagerDuty, Inc. common stockholders divided by weighted average diluted shares outstanding at the end of the reporting period.

Free cash flow and free cash flow margin

We define free cash flow as net cash provided by operating activities, less cash used for purchases of property and equipment and capitalization of internal-use software costs. We define free cash flow margin as free cash flow as a percentage of revenue. In addition to the reasons stated above, we believe that free cash flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash in excess of our capital investments in property and equipment in order to enhance the strength of our balance sheet and further invest in our business and potential strategic initiatives. A limitation of the utility of free cash flow as a measure of our liquidity is that it does not represent the total increase or decrease in our cash balance for the period. We use free cash flow in conjunction with traditional U.S. GAAP measures as part of our overall assessment of our liquidity, including the preparation of our annual operating budget and quarterly forecasts and to evaluate the effectiveness of our business strategies. There are a number of limitations related to the use of free cash flow as compared to net cash provided by operating activities, including that free cash flow includes capital expenditures, the benefits of which are realized in periods subsequent to those when expenditures are made.

PagerDuty encourages investors to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate PagerDuty’s business.

Please see the reconciliation tables at the end of this release for the reconciliation of non-GAAP financial measures to their most-comparable GAAP financial measures.




PAGERDUTY, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(in thousands, except percentages and per share data)
(unaudited)

Three months ended January 31, Year ended January 31,
2025202420252024
Non-GAAP gross profit and non-GAAP gross margin
Gross profit$101,472 $90,759 $387,834 $352,867 
Add:
Stock-based compensation1,288 1,726 5,984 7,586 
Employer taxes related to employee stock transactions50 61 162 199 
Amortization of acquired intangible assets2,200 2,354 9,075 8,614 
Restructuring costs— — (2)137 
Non-GAAP gross profit$105,010 $94,900 $403,053 $369,403 
Revenue$121,446 $111,117 $467,499 $430,699 
Gross margin83.6 %81.7 %83.0 %81.9 %
Non-GAAP gross margin86.5 %85.4 %86.2 %85.8 %
Non-GAAP operating expenses
Research and development$34,611 $35,548 $141,489 $139,769 
Less:
Stock-based compensation10,051 10,798 44,691 44,800 
Employer taxes related to employee stock transactions425 468 1,116 1,398 
Acquisition-related expenses228 354 978 838 
Amortization of acquired intangible assets— 88 116 350 
Restructuring costs426 (21)424 (26)
Non-GAAP research and development$23,481 $23,861 $94,164 $92,409 
Sales and marketing$53,084 $53,614 $201,821 $196,769 
Less:
Stock-based compensation7,483 7,983 31,185 30,345 
Employer taxes related to employee stock transactions310 330 773 919 
Amortization of acquired intangible assets633 629 2,530 2,459 
Restructuring costs150 — 140 (49)
Non-GAAP sales and marketing$44,508 $44,672 $167,193 $163,095 
General and administrative$25,496 $35,028 $104,296 $112,575 
Less:
Stock-based compensation10,309 11,735 44,350 44,421 
Employer taxes related to employee stock transactions282 324 745 982 
Acquisition-related expenses— 432 (1)962 
Amortization of acquired intangible assets— 22 29 87 
Restructuring costs156 7,164 180 8,615 
Non-GAAP general and administrative$14,749 $15,351 $58,993 $57,508 

Note: Certain figures may not sum due to rounding.





PAGERDUTY, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (continued)
(in thousands, except percentages and per share data)
(unaudited)

Three months ended January 31, Year ended January 31,
2025202420252024
Non-GAAP operating income and non-GAAP operating margin
Loss from operations$(11,719)$(33,431)$(59,772)$(96,246)
Add:
Stock-based compensation29,131 32,242 126,210 127,152 
Employer taxes related to employee stock transactions1,067 1,183 2,796 3,498 
Acquisition-related expenses228 786 977 1,800 
Amortization of acquired intangible assets2,833 3,093 11,750 11,510 
Restructuring costs732 7,143 742 8,677 
Non-GAAP operating income$22,272 $11,016 $82,703 $56,391 
Revenue$121,446 $111,117 $467,499 $430,699 
Operating margin(9.6)%(30.1)%(12.8)%(22.3)%
Non-GAAP operating margin18.3 %9.9 %17.7 %13.1 %
Non-GAAP net income attributable to PagerDuty, Inc. common stockholders
Net loss attributable to PagerDuty, Inc. common stockholders$(10,604)$(30,632)$(54,460)$(81,757)
Add:
Stock-based compensation29,131 32,242 126,210 127,152 
Employer taxes related to employee stock transactions1,067 1,183 2,796 3,498 
Amortization of debt issuance costs679 622 2,629 2,078 
Amortization of acquired intangible assets2,833 3,093 11,750 11,510 
Acquisition-related expenses228 786 977 1,800 
Restructuring costs732 7,143 742 8,677 
Loss (gain) on extinguishment of convertible senior notes
— 271 — (3,699)
Adjustment attributable to redeemable non-controlling interest1,844 2,480 11,725 6,568 
Income tax effects and adjustments(5,587)(1,353)(21,989)(3,273)
Non-GAAP net income attributable to PagerDuty, Inc. common stockholders$20,323 $15,835 $80,380 $72,554 
Non-GAAP net income per share, basic
Net loss per share, basic, attributable to PagerDuty, Inc. common stockholders$(0.12)$(0.33)$(0.59)$(0.89)
Non-GAAP adjustments to net loss attributable to PagerDuty, Inc. common stockholders0.34 0.50 1.46 1.68 
Non-GAAP net income per share, basic, attributable to PagerDuty, Inc. common stockholders$0.22 $0.17 $0.87 $0.79 
Non-GAAP net income per share, diluted(1)
Net loss per share, diluted, attributable to PagerDuty, Inc. common stockholders$(0.12)$(0.33)$(0.59)$(0.89)
Non-GAAP adjustments to net loss attributable to PagerDuty, Inc. common stockholders0.34 0.50 1.44 1.63 
Non-GAAP net income per share, diluted, attributable to PagerDuty, Inc. common stockholders$0.22 $0.17 $0.85 $0.74 
Weighted-average shares used in calculating net loss per share, basic and diluted90,422 92,168 92,000 92,341 
Weighted-average shares used in calculating non-GAAP net income per share
Basic90,422 92,168 92,000 92,341 
Diluted92,999 95,192 95,060 100,941 
Note: Certain figures may not sum due to rounding.

(1) On October 13, 2023, the Company provided written notice to the trustee and the note holders of the 2025 Notes that it had irrevocably elected to settle the principal amount of its convertible senior notes in cash and pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election, in respect to the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount of the 2025 Notes being converted. The company uses the if-converted method to calculate the non-GAAP net income per diluted share attributable to PagerDuty, Inc. related to the convertible notes due 2025 prior to the election on October 13, 2023. As such, approximately 5.0 million shares related to the convertible notes due 2025 were included in the non-GAAP diluted outstanding share number for the twelve months ended January 31, 2024, related to the period prior to the election on October 13, 2023. Similarly, for the twelve months ended January 31, 2024, the numerator used to compute this measure was increased by $2.5 million for after-tax interest expense savings related to our convertible notes.


PAGERDUTY, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (continued)
(in thousands, except percentages)
(unaudited)

Three months ended January 31, Year ended January 31,
2025202420252024
Free cash flow and free cash flow margin
Net cash provided by operating activities$31,402$22,155$117,891$71,974
Purchases of property and equipment(1,145)(971)(2,791)(2,164)
Capitalization of software costs(1,667)(1,572)(6,686)(5,384)
Free cash flow$28,590$19,612$108,414$64,426
Net cash used in investing activities$(10,246)$(37,400)$(19,968)$(30,525)
Net cash (used in) provided by financing activities$(2,815)$(2,061)$(116,138)$51,600
Revenue$121,446$111,117$467,499$430,699
Operating cash flow margin25.9%19.9%25.2%16.7%
Free cash flow margin23.5%17.6%23.2%15.0%

v3.25.0.1
Cover
Mar. 10, 2025
Cover [Abstract]  
Document Type 8-K
Document Period End Date Mar. 10, 2025
Entity Registrant Name PAGERDUTY, INC.
Entity Incorporation, State or Country Code DE
Entity File Number 001-38856
Entity Tax Identification Number 27-2793871
Entity Address, Address Line One 600 Townsend St.
Entity Address, Address Line Two Suite 200
Entity Address, City or Town San Francisco
Entity Address, State or Province CA
Entity Address, Postal Zip Code 94103
City Area Code 844
Local Phone Number 800-3889
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $0.000005 par value per share
Trading Symbol PD
Security Exchange Name NYSE
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0001568100
PagerDuty (NYSE:PD)
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